Netanyahu's comments came a day after he met Trump at the White House and thanked him for his decision to recognize Jerusalem as Israel's capital and move the U.S. Embassy there.
"It is especially great to be in America's capital now that (Trump) has recognized Jerusalem as Israel's capital," he said. "Thank you, President Trump for that historic decision."
The controversial step has infuriated the Palestinians, who claim part of Jerusalem for the capital of an eventual state and have now rejected U.S. mediation in efforts to resume long-stalled peace talks with Israel.
Trump has said his team is working on a peace proposal but it has remained a mystery and there is no timetable for it to be presented.
Netanyahu said he was willing to work with Palestinian leader Mahmoud Abbas to end the conflict but demanded that he first stop paying stipends to the families of Palestinians killed or jailed for committing anti-Israel acts.
"I have a message for President Abbas: stop paying terrorists," he said.